For five years, the Production-Linked Incentive was sold as India's manufacturing magic wand — produce more, export more, employ more. The math on the first two is working. On the third, it is not.
NITI Aayog's Impact Assessment released Thursday puts numbers to the unease. Of the 30 lakh jobs promised across 14 sectors, only 8,49,069 have materialized till FY26 — 28%. In contrast, investment has reached 76% of target and production 64%, after 58% of the combined scheme period is over. This is the first full review of a Rs 1.91 lakh crore flagship.
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The split is sectoral and structural.
Electronics is the poster child. Large-scale electronics manufacturing accounts for 51% of all PLI production. Mobile phone production vaulted, exports rose from Rs 22,868 crore in FY21 to nearly Rs 2 lakh crore in FY25. Telecom, pharma drugs and food processing are also marked "on track" on all four parameters — investment, production, jobs and exports.
The drag comes from capital-intensive bets. Bulk drugs, medical devices, advanced chemistry cells, drones, automobiles — they absorb capital but not labour. Automation means a Rs 500 crore plant needs 300 technicians, not 3,000 workers. The employment data is telling: hiring hit 86% of its annual target till FY23 and 156% in FY24, then collapsed to 31% in FY26. Firms built capacity, then paused hiring as global demand slowed.
NITI Aayog, with IIM Ahmedabad, makes a crucial point: this is not yet failure, but design flaw. PLI was supply-side — subsidize output. What India needs now is demand-pull government procurement that prefers PLI goods, trade deals that open markets, and MSME integration into value chains. The think tank asks for sector-specific redesign instead of one-size incentive of 4-6%.
For Indian labour market, the stakes are high. Youth unemployment in 15-29 age group is ∼10% officially, 40% among graduates per Azim Premji University. India adds 80 lakh youth to workforce yearly. PLI was meant to absorb them into formal factory jobs.
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Congress has weaponised the report — Mallikarjun Kharge flagged that only Rs 35,354 crore of Rs 1,91,049 crore outlay has actually been disbursed, calling PLI "under-delivery". Government counters that 42% of scheme time remains and hiring lags investment by design.
Both are partly right. PLI proved India can manufacture and export phones. It has not proved India can manufacture jobs at scale. That will need a PLI 2.0 — less about output, more about employment intensity.
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